With the CARES Act now law and most employers opting in for the COVID-19 distribution for their 401(k) plan, time will tell the damage done to the overall assets of 401(k) plans. One advisor on Twitter suggested that one large provider already saw $1.5 billion in COVID-19 distributions. I’m sure that the overall outflows will be a lot more as more and more employees are terminated as long as the shelter in place is still in effect.
The outflows will hurt participants, plan sponsors, and plan providers. It’s our mini-depression and time will certainly tell the negative impact it will take on the industry. Regardless, this industry will persevere and rebound.
